FOFA amendments to ward off ‘commission-hungry sharks’

Roy Morgan Research has come out in support of the paused amendments to FOFA, pointing to both industry and consumer protection benefits.

In a statement issued yesterday, the researcher said the proposed changes may help alleviate public image and perception problems suffered by the financial planning industry, reflecting on its previous finding that “only 25 per cent of [Australians] rate [advisers] favourably in terms of ethics and honesty”.

“Considering that the level of financial literacy among the Australian population is generally quite low, it’s vital for consumers to have confidence in the advice they receive from financial planners and other industry professionals,” said Roy Morgan Research CEO Michele Levine.

“The amendments to the FOFA legislation will hopefully encourage more focus on consumers’ best interests, and make financial advice more accessible, affordable and trustworthy for Australians while protecting them from commission-hungry sharks.”

The statement also suggested that issues in the financial advice industry not adequately addressed by FOFA or the proposed amendments – specifically listed as “independence (and ownership), commissions and consumers’ best interests” – should be scrutinised by the Murray Inquiry.